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Closure of Help to Buy Mortgage Guarantee Scheme sees more than half FTBs change plans

Mortgage Introducer

December 20, 2016

Aldermore’s latest first-time buyer index reveals more than half (52%) of surveyed prospective first-time buyers said that the closure of the government’s Help to Buy mortgage guarantee scheme has affected their planned property purchase. Among those who were aware of the scheme, the closure affects 63%.

It also shows home aspirations have remained the same quarter-on-quarter, with approximately one million people looking to buy their first home over the next year.

Charles Haresnape (pictured), group managing director, mortgages at Aldermore, said: “It is evident that despite strong activity in first-time buyer lending, those looking to buy their first home haven’t entirely shed their concerns about the effect the EU referendum will have on prospects, with almost half feeling less confident.

“The evidence would point to short-term and more concrete worries taking precedence in the minds of first-time buyers, with over half having to adjust their purchase plans due to the closure of the Help to Buy: mortgage guarantee scheme, which to date has helped over 80,000 people.

“It is important that lenders continue to offer high loan to value products to provide first-time buyers with a range of products to choose from, and brokers are kept up to date that many lenders will continue to offer 95% LTV lending after Help to Buy guarantee scheme finishes at the end of the year.

“Demand has remained robust, with no change quarter-on-quarter in those looking to get on the ladder in the next year.

“While more than a fifth of 25 to 34 year-olds are planning to be on the housing ladder in the next three to five years, there was a fall in confidence for those aged between 18 and 24 when considering their prospects over the next ten years, with raising a deposit continuing to be a major concern.

“Regional disparities remain in the difficulty first-time buyers feel they face in buying their first property, and we hope that the Government takes account of these differences in the housing whitepaper due to be released in the New Year.”

Further findings show that more than three in ten people (31%) feel less confident about their ability to purchase their first home due to the economic uncertainty created by the result of the EU referendum, with almost one in five (17%) feeling significantly less confident.

However, almost half (47%) said that the outcome of the Brexit vote has had no effect on their plans, less than those who felt the closure of the Help to Buy: mortgage guarantee scheme would have an effect.

There was a quarter-on-quarter rise in how many respondents felt it was currently ‘extremely difficult’ to buy their first property, up from 39% in Q3 to almost half (45%) in Q4.  Over half of those living in London (55%) said it was ‘extremely difficult’, up from 48% in Q3, while in Scotland this rose from 29% to 36% over the same period.


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